Automate – Collaborate – Measure – Optimise
OPTIMISATION, OUTSOURCING, AND THE REINVENTION OF THE BUY SIDE TRADING DESK
It’s an even hotter topic would you believe?!
Some of you may have seen the excellent report that Quinlan Associates just published highlighting why.
We recommend you contact Quinlan & Associates and take a look given the detail in there. However, as per the excerpts:
(there are) implicit costs being generated by asset managers from maintaining sub-optimal trading operations, many of which are frequently overlooked. We estimate a lack of technological proficiency, poor choice of execution method, and the widespread absence of internal / external partnerships is, on average, impacting fund performance by 1.2-2.7% p.a., costing the very largest asset managers in excess of USD 18 billion p.a. in opportunity cost (i.e. lost fund performance) to their end asset owner clients.
Through a careful examination of various strategic, operational, and financial considerations, we see sizeable benefits for asset managers who can get their trading construct right; from improved client engagement, execution quality, operating efficiency, and teaming / culture, to reduced internal costs.
Given the sheer size of the economic upside at stake for their end clients, we see this as a critical time for the asset management industry to start trading up.
Participants are becoming increasingly mindful of this in a highly competitive landscape where consolidation, structural change, regulation, and focus on measurement is now firmly entrenched. Trading plays a major role in this.
The execution leg of the investment process, originally treated as an ancillary, purely operational function, has evolved into a critical one. And yet, a significant proportion of fund performance is being left on the table, potentially running into the billions of dollars.
If an investment firm recognises the need to optimise, a primary task is to re-wire the culture towards a more collaborative, socialistic, technology-focused effort.
As you see, they could certainly be talking about us. Except for one key point:
While staffing a full-time desk is no doubt a meaningful economic commitment, outsourcing, despite its marketing, follows the basic tenet of Best Execution in somewhat of a haphazard manner. In farming out trading, it is likely that an asset manager could be falling short of both its performance and regulatory obligations.
There is a third way… insourcing the data/technology/automation that BTON brings is optimal whilst also retaining your trading desk/IP
And by leveraging data from across our client base to make informed decisions, BTON offers a true, evidence-driven Best-Ex solution.
and lastly…Welcome back! BTON Financial is now Working From Office again. An all new larger office to facilitate our continued growth.
It seems we aren’t alone as the City of London seems busy again as firms start returning and meeting ‘in the real’ is starting again.
Please do stop by and say hello!
Why is BTON different?
Uncompromised as broker neutral & independent
A cloud based SaaS solution
We don’t charge commission/BPS – we offer a clear monthly subscription fee
Global trading capabilities
A true Best Execution solution
Importantly, we leverage trading data from across the customer base to improve performance in our Smart Broker Router
We add capability and scale